Apollo Global Management Inc may not be offering enough as part of its C$2.5 billion takeover bid for Great Canadian Gaming Corp. Or at least this is what one of the shareholders thinks, as they have opted to hold onto their shares in Great Canadian, Bloomberg reported.

Burgundy Asset Management Ltd, one of the major shareholders in Great Canadian, has not to sell, the media outlet reported. Bloomberg said it had seen letter citing the company’s motivation according to which, Great Canadian’s Ontario assets are “irreplaceable” and the offer put forth by Apollo represents only a fracture of that potential price.

Apollo may disagree, however. The company issued its offer on November 10, when Great Canadian shares were traded at C$28.91, with Apollo agreeing to pay C$39 per share, or a substantial 35% premium on the closing price. The proposal was quickly accepted by Great Canadian’s board of directors.

Internal strife has been present ever since. Apart from Burgundy, another shareholder has declined the offer, describing it as inadequate. Both are sizeable owners with Burgundy holding 9.5% of the stock and hedge fund BloombergSen owning another 14% of the company’s assets.

Great Canadian, Apollo Say It’s All a Fair Game

Despite the immediate pushback from shareholders, both Great Canadian and Apollo have expressed confidence that the price offered was generous enough. On November 11, Apollo made a statement in which it defended the issued price, arguing that it would provide immediate and significant value to shareholders.

Not least, Apollo cited the difficulties surrounding the covid-19 pandemic and the opportunity to liquidate assets at a significant upmark. However, Burgundy took that argument and used it against Apollo, arguing that it was precisely because of the pandemic that Apollo could afford to take this opportunity and try to buy shares at a much lower price.

Worse still, Burgundy described Apollo’s actions as an “opportunistic, underwhelming, unsolicited bid.” Burgundy argued that Apollo had failed to factor the immense value and potential of the Canadian gambling industry, which has been hard to pinpoint in exact numbers because of the lack of clear regulation.

Burgundy Says Covid-19 Isn’t a Threat

Different sources, however, estimate between C$17.3 billion and C$30 billion generated annually from gambling. These numbers seem to back Burgundy’s position which talks about the “tremendous potential” of the Ontario properties alone.

Responding directly to the covid-19 argument, Burgundy assured that should the Ontario’s asset become financially challenged due to the pandemic, there was a lot of wiggle room the company could use thanks to its assets in Atlantic Canada and British Columbia.

“We believe risk posed by Covid-19 is manageable,” Burgundy said. Because of this, Burgundy said, the firm would not be voting for the deal.